I had cut this name back on the 18th [Dec 18: Bookkeeping - Cutting Sequenom] after making 30% in 5 days
Sequenom (SQNM) which we love fundamentally (see earlier post today) is now at it's early November peak - we will assume it stalls here and creates a double top (from which it would fall). If I'm right, we'll rebuy at a lower price; if I'm wrong (which never happens) we'll rebuy at a higher price.
I am cutting Sequenom (SQNM) down from a 2.1% stake to 0.5% stake, with sales in the $20.70s.
The assumption we made on the 18th of a double top forming was accurate and since then the stock has pulled back smartly. I put in a limit order, just over the 50 day moving average ($18.50) which triggered this morning (looks like the stock actually fell briefly into the upper $17s in fact). Good enough, we were able to rebuy the stake we sold less than two weeks ago in the $20.70s, in the $18.50s. (roughly a 11% lower cost basis) In calmer markets this "core and edge" strategy works very well - as a bevy of trades the past 5-6 weeks have worked to perfection.
We added to our core position of 0.5% and now are back up to a 2.6% stake. The stock has already rebounded to the upper $19s by early this afternoon. If only they all worked out like this....Going forward the strategy I employ on a stock like this will be to repeat what I did above: sell the "edge" part of the position in the lower $21s (which was the recent high) and if the stock bursts through that recent high, this should signal a new leg higher so we'll rebuy (somewhere near $22). If it fails at that level (lower $21s), we'll keep repeating what we just did (rebuy the edge position lower and keep trading it) So far so good.
[Dec 18: Sequenom in Investors Business Daily]
[Oct 30: Sequenom Misses But We Don't Really Care]
[Oct 7: Sequenom Down 8% on "Competition" Threat]
[Sep 23: Sequenom - All Systems Go on Down Syndrome's Test]
[Aug 13: Beginning Stake in Sequenom]
Long Sequenom, Emergent BioSolutions in fund and personal account
